A whole lot of us have fond memories of General Motors coming to India. In fact it was one of the early entrants into the country and as we've already told you today, the company has ceased its sales operations in India. The decision comes after an extensive review of operations in GM's International markets reflects a series of actions taken to improve global business performance that began in late 2013. It has taken the employees a GM India by surprise considering that it recently signed a three year wage agreement at the Talegaon plant.
According to a source at the company, around 400 employees will be relieved off their duty and there will be a generous separation package given to them. This effectively means that GM India will be asking 8 per cent of its work force here to leave the company and that's a big number. GM is working with employees, their union representatives and local authorities to provide transition support.
General Motors India has seen a downslide in the area of sales, especially domestic sales and while it vowed in 2015, that it would get back into the market and grab a market share of 3 per cent by 2020, clearly there was no result to show. In the past two years the company had launched one car, the Trailblazer and had postponed the launch of the Spin MPV first and finally decided not to bring it at all. It was then the turn of the bread winner for Chevrolet, the Beat to take centre stage and at the 2016 Auto Expo, we saw all the derivations based on the hatchback's new generation model. That's when we knew that the company was serious about what it said. Sadly, the business plan was aimed at a leaner organisation with stronger financial performance and this is one reason why the company's South African arm had to offload its manufacturing to Isuzu Motors.
Chairman and Chief Executive Mary Barra said in a statement, "As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company. Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalize on growth opportunities for the long term."
GM India's move to cease domestic operations does not really come as a surprise if you see the numbers. In FY2016-17, the company sold 25823 units in India, while exports more than doubled to 70,696 units during the same time. To put things into perspective, the company exported 37,082 units in FY 2015-16. The jump was a big one and GM had in fact become the 6th largest passenger vehicle exporter in India.
The company now will be using India as an export hub as the Talegaon plant has a capacity of manufacturing 130,000 vehicles a year. Its Halol plant in Gujarat, which ceased operations recently, will be sold to its Chinese joint venture partner SAIC Motor Corp. GM very recently transitioned 350 of its employees from Halol to the Talegaon plant.
